Men in England with late-stage prostate cancer could soon be stopped from accessing "breakthrough" drug abiraterone unless they can afford to buy the drug themselves or pay for private medical insurance.

Trials of abiraterone found the drug extended a patient's life by an average of four months and reduced the pain suffered. Although it was licenced for use in the UK by the European Medicines Agency (EMA) in 2011, the National Institute for Health and Clinical Excellence (Nice) has issued a draft decision that the drug is too expensive for use in the NHS.

Abiraterone, which is made by pharmaceutical company Janssen, part of the Johnson & Johnson group, costs £3,000 a patient each month. About 480 NHS patients in England have been treated with it since November 2011 through the Cancer Drugs Fund, a £200m-a-year fund set up by the government in 2010 to enable cancer sufferers to benefit from drugs not approved by Nice or not yet available through the NHS.

Patients apply through their clinicians for funds, which are administered by strategic health authorities around the county. In the rest of the UK, patients must apply to an exceptional case committee for treatment.

But money for the Cancer Drugs Fund dries up in March 2014 when it will be replaced by a "value based pricing" system, and the future remains uncertain.

Sarah Woolnough, director of policy at Cancer Research, said: "At the moment you can get abiraterone through the Cancer Drugs Fund, but it's an issue of concern that the tap might be turned off. It is unclear what will happen under the new system when Nice has said no to a drug."

Owen Sharp, chief executive of the Prostate Cancer Charity, said Nice's decision was a bitter blow to thousands of men and their families: "Quite simply, abiraterone prolongs the life of men with incurable prostate cancer. The drug is one of the biggest breakthroughs in the treatment of the disease for many years and it will be devastating if this drug remains out of their reach when they need it the most."

Some private medical insurance (PMI) companies including Bupa and WPA have confirmed that their policies will cover the cost of treatment.

Dr Annabel Bentley, medical director of Bupa Health and Wellbeing, said: "If a cancer drug is licensed by the EMA and is clinically appropriate for our members, we will fund it regardless of cost.

"Bupa routinely funds abiraterone for members whose prostate cancer has spread. We fund cancer treatments for as long they are needed and we do not apply cost or time limits."

Rick Betton, who was diagnosed with aggressive prostate cancer in July 2010, is claiming for abiraterone through his employer's PMI scheme. He was prescribed two different drugs previously through the NHS which failed to work, but when his consultant applied to the NHS for abiraterone he was rejected. "I thought it was worth seeing whether I could claim through my Bupa policy, and they now deliver the drugs by courier every three weeks to my home. I take four pills every morning."

Rick Betton, pictured with his wife Rachel, says abiraterone has made life a lot more comfortable. Photograph: David Sillitoe for the Guardian

Betton was diagnosed with prostate cancer after collapsing following a night out: "I was staying in a hotel and woke up in the night sweating and with a pain in my back. I got home but collapsed on the drive, and blood tests confirmed I had cancer three days later."

However, the cover is not provided universally by all insurance companies. A spokesman for Axa PPP said: "We do not pay for abiraterone treatment of prostate cancer because the drug is given orally as tablets on an out-patient basis, and our policies do not cover out-patient drugs and/or drugs prescribed by a member's GP – for example, hormone therapy tablets such as tamoxifen."

Betton says the drug has enabled him to regain some of the weight he has lost and carry out some of the day-to-day functions his wife Rachel has been doing for him. "I am finding life a lot more comfortable, and felt better in myself. My condition seems to have stabilised. It meant I could walk my eldest daughter Gabriella down the aisle in November. I wouldn't have been able to do that without abiraterone."